US producer inflation rose 5.4% annually in August. Selling across the cryptocurrency market accelerated following the data.
Bitcoin fell 3.5% to $76,800. Ethereum dropped 3.8% to $2,417.
Bitcoin had climbed as high as $79,606 during the day. However, selling pushed the price toward its daily low.
Rising inflation strengthened expectations surrounding the Federal Reserve’s interest rate policy. Higher Treasury yields also pressured risk assets.
The crypto market now awaits US consumer inflation data. The US will publish August CPI figures on September 11.
US producer inflation climbed to 5.4%
The US Labor Department published the August PPI figures. Producer prices increased 0.4% on a monthly basis.
Economists also expected a 0.4% monthly increase. Therefore, the monthly figure matched market expectations.
However, annual PPI reached 5.4%. Markets expected the annual rate to reach 5.3%.
Producer inflation stood at 4.8% in July. Consequently, the latest figure signaled accelerating price pressures.
Prices excluding food and energy increased 0.2% monthly. Annual core PPI rose to 4.6%.
This rate stood at 4.2% in July. Therefore, underlying price pressures also remained strong.
Rising energy costs particularly pushed producer prices higher. Increasing oil prices amplified inflation risks.
Bitcoin fell below $77,000
Bitcoin traded around $78,000 before the PPI report. Selling pressure increased considerably after the data.
BTC fell to $76,788 during the writing of this report. Its daily loss reached 3.5%.
Consequently, Bitcoin moved below the $77,000 support level again. The price also erased all its intraday gains.
Bitcoin recently produced an important technical signal. Its 50-day moving average crossed above the 200-day average.
Investors call this pattern a “golden cross.” However, macroeconomic pressure limited short-term technical optimism.
The $80,000 level represents strong resistance for Bitcoin. Meanwhile, the $76,000 region remains important support.
Continued selling could bring $75,000 into focus. Conversely, buyers could target $77,000 again.
Ethereum’s loss reached 3.8%
Ethereum also declined alongside Bitcoin. ETH fell as low as $2,416.
The token had climbed to $2,517 during the day. However, strong selling ended its recovery attempt.
Ethereum’s daily loss reached 3.8%. Therefore, ETH slightly underperformed Bitcoin.
Altcoins generally move more sharply during risk-off periods. Consequently, macroeconomic uncertainty could intensify pressure on altcoins.
Changes in Bitcoin dominance also carry importance. Rising dominance could deepen losses across altcoins.
Rising oil prices and Treasury yields pressured crypto
Brent crude remained above the $100 level. The price surpassed $105 during the day.
Elevated oil prices increase energy-driven inflation risks. This outlook complicates the Fed’s interest rate decision.
The US 10-year Treasury yield approached 4.9%. Rising yields reduce demand for risk assets like cryptocurrencies.
Wall Street futures also declined following the data. Nasdaq 100 futures dropped about 1.1%.
S&P 500 futures lost 0.47%. Meanwhile, Dow Jones futures declined 0.29%.
Therefore, selling pressure extended beyond the cryptocurrency market. Declining global risk appetite affected several asset classes.
Crypto market awaits US CPI data
Investors now focus on Friday’s US CPI report. This data could carry greater weight in the Fed’s decision.
Stronger-than-expected CPI could increase rate-hike expectations. Such an outcome could accelerate selling across cryptocurrencies.
Lower inflation could provide short-term market relief. However, oil prices remain a key risk.
The Fed will announce its interest rate decision on September 16. Therefore, Bitcoin volatility could remain elevated in the coming days.
